Martin Lakos gives his wrap of the markets

For a look at the day on the markets, Lateline Business is joined by Martin Lakos at Macquarie Private Wealth.

Transcript

WHITNEY FITZSIMMONS, PRESENTER: And for a look at the day on the rest of the markets, I spoke earlier to Martin Lakos from Macquarie Private Wealth.

Martin Lakos, some soothing words about US interest rates from Ben Bernanke, but the concerns over Greece seems to have rained on the parade somewhat.

MARTIN LAKOS, MACQUARIE PRIVATE WEALTH: Yeah, look, very much so, Whitney. Ben Bernanke's commentary that, basically, the Federal Reserve will look to keep rates at a fairly stimulatory level for the rest of this year certainly saw markets improve overnight in the US and the tail end of European trading.

We saw the best of that first thing in the morning, with the first half hour's trade here. We were certainly rallying, in fact up almost ... you know, 40 points at one stage. But we've actually had a 94-point range; we've turned down to be down about 54 points.

The sell-off has really been predicated on a couple of things. Firstly, there was some commentary out of the UK in one of the tabloids there that the Deputy Prime Minister of Greece has made some fairly negative commentary with regards to Germany's war time efforts, and that is obviously not going to help their chances of bailout in regards to Germany's attitude towards Greece. It may be a bit of a storm in a teacup, but it certainly doesn't help their chances.

The other thing that's been impacting our markets over the last couple of days of trade is that we've seen some fairly significant unwinding of some currency trades, where there's been overseas investors, long Australian-dollar assets.

That's been unwound and we saw two day's worth, including today, of some fairly heavy selling in portfolio styles.

And I guess the other side of the day has been, obviously, we've been well embroiled in the reporting season.

WHITNEY FITZSIMMONS: On the reporting season, it's virtually at an end, so what is your verdict?

MARTIN LAKOS: Look, you'd have to say, without a doubt, across the board, in broad terms, a very positive reporting season.

We are now through about nearly 80 per cent of the number of companies owned by market capitalisation. It does appear that the earnings are up about 5.5 per cent above analyst estimates, that is, analyst estimates before the reporting season. So that has to be deemed as a good outcome.

Let's try and break it down a little bit.

What really has been featured is that there's no doubt that corporate Australia has been focussing on costs, where marginal expansion and profitability's going to really start to kick in when we start to see revenues start to grow. Some sectors have already seen that, others are lagging behind.

And so we are expecting to see a pretty good reporting season for the June period as well, but there's no doubt the market has penalised those stocks that have not come up with expectations. And a great example was today with Toll Holdings, and that stock was sold down very heavily - down about 17 per cent - because it did disappoint.

But if I could just quickly go through a number of the key sectors that have done really well. Obviously, the banks - we're very happy with the banks both ... in all respects and, in particular, the big feature was the improvement in their bad and doubtful debt side. And we're expecting to start seeing the banks pick up their dividend payouts in towards the end of this year.

Among the cyclicals, a little bit mixed. The steel stocks, OneSteel, put in a good result; BlueScope was a little bit disappointing. Amongst the defensives, Coca Cola, a great result, and Fosterís disappointed as well.

It's also worth noting the listed property trust stocks. It really was fairly benign for them in terms of the broad reporting season and we also saw, within the reporting season also, that contractors and mining did fairly well. Although one stock did mar that sector's performance, which was obviously Worley, but they'd already given the market a heads-up on their result.

But Leighton Holdings, a nice high-quality result. One stock that does appear to have really been, or two stocks should I say, that have been really well received: CSL, good result and also Wesfarmers, where there's an improvement from the Cole's food and liquor businesses as well as the cyclical side, the hardware and their coking coal business.